1)John, age 60, purchases an annuity from an insurance companyfor $90,000. He is to receive $500 per month for life. How muchincome must he recognize in the current year?

2)Emma, age 33 is single and has no dependents. She earned $40,000 this year before she was fired for poor job performance.Emma subsequently received $3,000 this year in damages from apersonal injury action. Prior to her firing, she injured her backupon lifting a file cabinet and received $5,000 in worker’scompensation. How much should Emma include in her gross income?